We’re Not at Peak Oil Yet

By: Anneken Tappe · December 19, 2023 · Reading Time: 2 minutes

Another Year, Another Peak

Global efforts to move past fossil fuels to renewable energy alternatives could have you believe that the days of peak oil demand are behind us. But that would likely be wrong.

U.S. oil production hit a record of more than 13 million barrels per day, and 2024 is expected to be even stronger. Clearly, the nation is far from being done with fossil fuels.

The Permian Basin

The U.S. oil and gas industry saw several billion dollar mergers and acquisition this year, signaling a strong outlook for the new year. The Permian basin, located in Texas and New Mexico, is the largest petroleum-producing geological formation in the U.S., and stands at the forefront of this oil resurgence.

Mergers and acquisitions of companies operating in the Permian basin exceeded $100 billion in 2023, including ExxonMobil’s (XOM) $59.5 billion bid for Pioneer Natural Resources (PXD), Chevron’s (CVX) $53 billion takeover of Hess (HES), and Occidental Petroleum’s (OXY) $12 billion buyout of CrownRock.

Emerging Market Demand

Oil demand isn’t just localized. In fact, a lot of global demand comes from emerging economies that are still in the process of ramping up their industrial capacities. That is why Chinese economic growth is so pivotal to energy demand, for example, and why peak oil demand may not be reached for a while.

That said, the International Energy Agency doesn’t quite share this optimism, predicting that demand for the three major fossil fuels (oil, gas and coal) will peak sometime this decade.

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